Pass necessary journal entries relating to the issue of Debentures for the following:
(a) Issued ₹ 28,000; 10% Debentures of ₹ 100 each at a premium of 15% redeemable at par.
(b) Issued ₹ 30,000; 10% Debentures of ₹ 100 each at a premium of 10% and redeemable at a premium of 15%.
(c) Issued ₹ 80,000; 10% Debentures of ₹ 100 each at par repayable at a premium of 10%.
Answers
Answer:
c is the correct answer
Solution:
Journal Entries
Sr. No. Particulars Debit Rs. Credit Rs.
a. Bank A/c Dr. 32,200
To Debenture Application and Allotment A/c 32,200
(Being application money received 280 debentures rs.115 each)
Debenture Application and Allotment A/c Dr. 32,200
To 10% Debenture A/c 28,000
To Securities Premium Reserve A/c 4,200
(Being 280 10% debenture issued at a premium of 15%)
b. Bank A/c Dr. 33,000
To Debenture Application and Allotment A/c 33,000
(Being application money received)
Debenture Application and Allotment A/c Dr. 33,000
Loss On Issue of Debentures A/c Dr. 4.500
To 10% Debenture A/c 30,000
To Securities Premium Reserve A/c 3,000
To Premium on Redemption of Debentures A/c 4,500
(Being 300 10% debenture issued at a premium of 10% and redeemable at a premium of 15%)
c. Bank A/c Dr 80,000
To Debenture Application and Allotment A/c 80,000
(Being application money received)
Debenture Application and Allotment A/c Dr 80,000
Loss On Issue of Debentures A/c Dr 8000
To 10% Debenture A/c 80,000
To Premium on Redemption of Debentures A/c 8000
(Being 800 10% debentures issued at a par and redeemable at premium of 10%)